Why are women paid less and what to do about it

Since launching Balancing Bravely, I’ve become much more open about sharing that I discovered I was massively underpaid in my last position. When it first happened, I shared with friends and family, but didn’t share with anyone I would cross in my work circles – probably because I was embarrassed. As I faced my embarrassment and started to open up to women in my professional realm, the responses have been pretty consistent.

It almost always goes like this:

Colleague: What? 47%?

Me: Yes, 47%

Colleague: Was it a man?

Me: No, it was a woman, and the one time I spoke to her about pay gaps, without disclosing our pay gap, she shared her frustration that men in similar positions in our organizations were paid $20-30,000 more than her.

Colleague: (Shock – often no verbal response).

Then a couple of days later, some people come back with a few questions related to their own pay questions/struggles. Sometimes they ask if I would mind speaking with someone else in a similar situation – because so many of us know someone who is underpaid. In two recent conversations, people talked to me about considering taking a new position involving a significant pay cut. This really got my wheels turning, since I think it’s the right thing to do for both of these women. At the same time, taking a pay cut seems to conflict with my new premise that “you should be paid what you are worth” and should consider how they can move through the 7 steps of achieving financial freedom.

I left these conversations feeling an internal conflict – how could I advocate for getting paid what you are worth and suggest they take a pay cut? I did what I do best when encountered with something I don’t know or leaves me feeling conflicted – I researched and identified 6 key reasons women end up being underpaid.

These reasons are focused on things you have control over and can change. There is clearly a pervasive wage gap that exists at a societal level that you will have almost no influence over (e.g., discrimination, gendered roles, undervaluing women’s knowledge, skills, and experience). So what are the reasons that may have led you to be underpaid that you can change?

1. Do you know what you are worth in the marketplace?

In order to get paid what you’re worth, you need to know what you are worth. Luckily, it is easier to know what you’re worth in the marketplace now than ever before. Websites like www.glassdoor.com and www.payscale.com have extensive information about pay, broken down by job title and region.

Seeing these general numbers is only part of understanding what you could be paid – you also need to talk to people. After I learned I was underpaid, I started asking around, I was surprised by how open people were to talk about pay. Most people didn’t disclose their salaries, but they were very open to having conversations about what they thought people were being paid, pay brackets for different positions, and whether they thought they were personally being under- or over-paid.

Do you know what you were worth in the marketplace? Are you being paid close to that number?

2. Do you believe what you are worth in the market?

When I first learned that I could be getting paid tens of thousands of dollars more that I was currently getting paid, I didn’t really believe I was worth that. That’s hard to say, but now that a year has gone by, I can say with confidence that I did not really believe I was worth that much more money. I was good at my job, actually I was great at my job. I have a really unique skill set. But I didn’t really know what anyone was worth in the market, and therefore didn’t believe that I was worth that much.

We don’t spend enough time thinking about this - how our perceptions of our own value drive how much we will get paid. If you are struggling with questions of worth and money, I highly recommend checking out Amanda Steinberg’s book Worth It: Your Life, Your Money, Your Terms. This truly revolutionized the way I thought about money. Money has never been my primary driver, so it was hard for me to let money guide my decisions. At the same time, I knew I did not want to be underpaid or under-valued for my work.

One way to think about it is:

If you don’t believe you’re worth that amount of money, you’re not going ask for it, you’re definitely not going to get it.

Gaining the confidence that you were worth a certain amount of money, and that you should ask for what you’re worth is a slow and sometimes challenging process. It’s much harder than writing the perfect resume, or crafting a beautiful cover letter. But at the end of the day, the impact this will have on your whole life is monumental.

How can you get others to believe in your value if you don’t believe it at first? How can you get others to have confidence in you, if you stop first have confidence in yourself?

Luckily there’s probably many people who know your value and who have confidence in you right now. Reach out to those people. Talk to them, share your doubts and insecurities. Be selective (don’t share with everyone you meet), but open up about how you are feeling. Remember, the goal is not to look for compliments; the goal is to gain a deeper understanding of your own strengths, and the ways that you can improve yourself. When you start down that path, with people on your side to support you, you are building the foundation to set yourself up for success.

3. Did you negotiate for your salary?

Most women don’t negotiate. The research is clear. We don’t come back with counter-offers, we don’t negotiate job perks, we don’t ask for anything as we are getting hired. Maybe you believe that you will be able to negotiate more once they know how amazing you are, but the research is clear that your starting salary has a huge impact on what you will be paid. If you are gearing up to negotiate, Lois Frankel’s work is great, in particular, you should read Nice Girls Don’t Get the Corner Office and Nice Girls Don’t Get Rich.

4. You chose trade-offs for less pay – more flexibility or more job stability.

It’s fairly common for women, particularly mothers, to choose lower pay in exchange for more flexibility. On the one hand, I absolutely believe that flexibility can improve your work-life balance and happiness. I had a job where I worked from home one or two days a week, and that flexibility did amazing things for my work-life balance. But, in this day and age, people can often get flexibility without the pay cut. Many people enter negotiations assuming that they will take a pay cut for flexibility without before we’re being told we have to. Ask around, see what other people are doing. Men, especially fathers, are increasingly asking for flexibility, but not expecting the pay cut that women are.

On the flip side of flexibility, there are also people who choose job stability over getting paid more. A perfect example is a graphic designer that I know – she had a tumultuous childhood and really craves stability. Therefore, she took a position as a graphic designer on staff, getting paid much less than she would as a graphic design consultant, but for her own mental health she really appreciates the stability. She is very aware that she could be paid more, but is consciously choosing this option.

In the end, you may decide that the flexibility or the stability is worth getting paid less – for now. That means it’s essential to reassess these trade-offs as your circumstances change.

5. You are choosing to use your skills to help people

I am in a helping profession. My Balancing Bravely partner Beth is in even more of a helping profession – as a counsellor, helping people overcome self-esteem challenges, supporting them to stop making excuses and dig deep on the real reasons they aren’t taking action. The reality is that you will be paid less if you work in a “helping” profession – teachers, social workers, counsellors, healthcare workers, non-profits. When I was exploring job options after learning I was underpaid, one option that came up was using my skills (i.e., how to change people and organizational behavior) outside of the healthcare/public health realm, for example working for a bank. It became very clear, very quickly that I could be paid exponentially more working for a bank than working in public health. However, I didn’t need to think about this for more than a couple of minutes, because I know that my passion lies in changing behavior in healthcare and public health and mental health, not in large corporations. I’m prepared to get paid way less to do this. The more important question then is whether you are getting paid what you are worth within your industry.

6. You have taken on significantly more responsibility without an appropriate increase in pay.

Another common phenomenon, especially among women, is taking on more responsibility, while remaining in the exact same job title. Sometimes it involves getting promoted, but with only a moderate increase in pay, compared to a large increase in responsibility. As I look around at friends and colleagues (mostly women in their 30s), I’m seeing this over and over again.

Taking on more responsibility with an appropriate pay increase is what contributed to my large pay gap. When I was hired, my pay seemed quite appropriate, but at the time I was only managing projects and not people. Over the course of seven years, I grew my team from 0 to 20 direct reports. But it did not come with the equivalent increases in pay.

On an almost daily basis, I encounter brilliant, hard-working women who go above and beyond, but do not get compensated for it. Don’t get me wrong, I’m all about dedicating yourself to your job – I don’t wish that I worked less hard or was less dedicated. But I do wish that I had had honest and open conversations about my work, value, and pay much earlier on.

How to create an action plan to get paid what you are worth

1. Research to find out what you are worth – look up comparables online and talk to friends and colleagues.